Improvement? Yes, but it’s still a long way to go
Auditor-General Kimi Makwetu released audit outcomes of the country’s 278 municipalities this week, which showed that more municipalities were not complying with financial reporting.
Our government has applauded the fact that 54 out of 272 municipalities audited achieved a clean audit – up from 40 in the 2013/14 financial year. This is still a mere 19.85% clean audit growth 22 years after democracy.
It is an encouraging development that municipalities were able to keep records of their income and spending so auditors could check whether communities received the services they paid for.
Makwetu also pointed out that 92% of the municipalities’ finances urgently required financial management. While the baby step on keeping records is welcome, financial management at local government level has been an issue that has needed attention for years.
Auditor-General reports have consistently painted a bleak picture against the backdrop of poor accountability, wasteful expenditure and noncompliance to legislation. A total of 240 municipalities recorded R14.7 billion in irregular expenditure.
This kind of spending, unfortunately, opens up municipalities to the possibility of fraud and corruption.
Added to this, the lack of finance management skills means municipalities continuously fail to put systems in place that control how much was received, spent and recovered from defaulters. This led to some municipalities not even being able to pay Eskom for electricity that had already been sold to consumers.
It is clear that municipalities need to stop talking about skills shortages and start doing something to grow them.